It’s all about monetary base expansion Bob.It's not as much the...

It’s all about monetary base expansion Bob.
It's not as much the gold price going up as it is the value of dollars keeps dropping as they expand the monetary base.
That’s why everything goes up, not just gold.
What does stand out right now is that gold has not kept up with costs or the monetary base.
That is why gold producers are struggling lately.
Gold is not rising quickly enough to keep up with rising costs, both cash costs and capital costs.
Thankfully ABU will have well below average costs for both operating and especially capital costs so is mostly immune from this.
Its not surprising to see producers drop 50% on a 15% correction in gold because their margins are squeezed so much that a 15% drop in gold probably represents a 50% fall in profits on a sector wide average.
In fact one industry CEO recently said that all incluse costs (including capital, exploration etc) for producing an ounce of gold is currently $1500. If so bringing on new mines with average costs would not be worthwhile.
It’s important to single out the lowest cost mines for any long term investment in current producers to make sure you limit your potential downside while waiting for the upside. The reverse also holds though so after these large falls and assuming gold has bottomed, the higher cost more leveraged producers might outperform (those that dropped the most could recover the most- as long as the falls were only due to lower price of gold).
I expect a 15-20% rise in POG will see up to a 100% rise in sp’s of many producers from current lows if the market believes the gold price rise is sustainable simply because that would be enough to increase expected profits by 100% from current expectations.
When the the gold price catches up to the money supply ($2,500 and higher) and cost increases, gold producers should recover their margins and move much higher, and ABU will be flying multiples higher than anyones current targets based on spot gold.

For those that argue a possible deflation would cause gold to drop. I disagree, other than over the short term as in 2009.
Gold has not been going up because everything else goes up in price.
Gold goes up because of the expansion of money.
Japan has struggled with deflation, yet the chart below shows the gold price has close to quadrupled for Japanese investors over the last 10 years despite most other asset classes in Japan being flat or down.